* Says Canadian Competition Bureau issues no-action letter
* Avis also expected to get Canada approval
* Focus on U.S. antitrust clearance
(Recasts throughout; adds details, background, analyst
By Megha Mandavia and A.Ananthalakshmi
BANGALORE, Aug 2 Car rental company Hertz
Global Holdings Inc (HTZ.N) said it got Canadian antitrust
approval to buy budget brand Dollar Thrifty Automotive Group
DTG.N, but did not say if it will top rival Avis Budget's
Hertz said it will continue to work towards completion of
the Dollar Thrifty deal in the "near future."
Last week, Avis Budget Group Inc CAR.N bettered Hertz
Global Holding's offer for Dollar Thrifty, but the bid price
was still lower than Dollar's then market price.
Hertz and Avis began the process to get antitrust approval
in May and have both received "second requests" from the U.S.
Avis is also expected to get antitrust approval from Canada
without any hurdles, but getting U.S. Federal Trade
Commission's (FTC) approval might be a challenge for both the
companies despite their willingness to divest some businesses.
"One shouldn't necessarily look at it and say that they got
Canadian approval, so U.S. approval through the FTC is a
given," said Avondale Partners analyst Fred Lowrance.
"Canadian business is a much smaller piece of the overall
"It sounds like that has been a more intensive review and
there is a lot more things the U.S. regulators seem to be
concerned with at this point," said Lowrance.
Last week, a Hertz spokesperson told Reuters the U.S. FTC
was still reviewing information it provided at the regulator's
request, and there has been no further update. [ID:nSGE66S0K1]
Hertz has agreed to divest its Advantage brand and up to
$175 million worth of revenue-generating business lines or
locations, while Avis has agreed to give up as much as $325
million in revenue, to get antitrust clearance.
Industry players have raised concerns that both the deal
attempts could draw a lot of scrutiny from antitrust
authorities as the consolidation in the rental car business has
been rapid. [ID:nSGE63T0J6]
Hertz is thought to have a clearer path to approval,
because it mostly focuses on more expensive segments of the car
rental market, while Avis already has a budget brand that
competes with Dollar Thrifty.
The acquisition of Dollar Thrifty will lead to a situation
where the top three players would control over 95 percent of
the car rental market, with privately held Enterprise
Rent-A-Car leading the pack.
"So at least for Hertz they can check this one off the list
but the focus by them, by investors, by me is on the U.S.
approval process," said Lowrance.
Shares of Hertz were up 27 cents, or about 2 percent, at
$12.01 on the New York Stock Exchange. Shares of Avis and
Dollar Thrifty were also up 2 percent.
(Reporting by A.Ananthalakshmi and Megha Mandavia in
Bangalore; Editing by Prem Udayabhanu, Vyas Mohan)